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USD/CAD Breaking Above a Falling Trendline

The USD/CAD has respected support at 1.0708 this week, and is now advancing, showing a bullish continuation attempt in the near-term. The 4H chart shows price pushing above the 200-, 100-, 50-period SMAs and the RSI holding above 40 after tagging above 70. This shows a shift to a bullish mode and bullish momentum in the 4H chart:

USD/CAD 4H Chart 7/25:

With the 4H bullish trend and momentum developing, we should expect a short-term bullish attempt that might even push above the high on the month at 1.0794. Note that this price action would break above a falling trendline seen in the daily chart that comes down from the 2014-high of 1.1278. A break above this trendline does not necessarily signal a bullish reversal. The daily chart still looks bearish, evidenced by the moving averages and RSI.

USD/CAD Daily Chart 7/25

If price comes up to the 1.0815-1.0850 area, look for it to stall, and look for the daily RSI to also stall around 60. If price and RSI then starts to turn down, we should expect a bearish continuation attempt. If price can then push below 1.07, USD/CAD should gain more confidence in the bearish continuation outlook, which has the 1.0620 and beyond in sight. Below 1.0620, the next key support is around 1.0560, the support during the Dec 2013 consolidation.